Anthem: Gail Boudreaux named CEO

FILE
PHOTO: The office building of health insurer Anthem is seen in
Los Angeles, CaliforniaThomson
Reuters

Gail Boudreaux has been named Anthem’s CEO after Joseph
Swedish stepped down.

Swedish will remain with the company as executive
chairman until May 2018 and as a senior adviser until May
2020.

(Reuters) – Anthem Inc’s Joseph Swedish will be replaced as chief
executive by industry veteran Gail Boudreaux but will stay on as
executive chairman until May 2018 and be a senior adviser through
May 2020, the health insurer said on Monday.

The Wall Street Journal first reported the news on Friday.

Swedish will continue to receive his current salary as executive
chairman and be eligible for a prorated bonus and as an adviser,
he will be paid $4.5 million per year.

Swedish’s move comes at a time of change for Anthem, the No. 2
U.S. health insurer. The company cut Obamacare individual market
participation by 70 percent for next year and recently announced
plans to bring its pharmacy benefit management in house. It also
may face a much larger Aetna Inc, which is considering a deal
with CVS Health Corp, according to sources.

Boudreaux was most recently CEO of United Healthcare, a unit of
the biggest U.S. health insurer, UnitedHealth Group Inc. Before
that, she was an executive at the next largest operator of Blue
Cross Blue Shield licensed insurers, Health Care Services Corp,
and at Aetna.

BMO Markets analyst Matthew Borsch said in a research note that
Boudreaux is held in high regard by investors but that Anthem’s
stock is still a “market-perform” given the company’s
slower-growth business mix.

“We expect there may be a period of uncertainty among investors
until the reasons for the reported leadership change are
understood and fully accepted by the market,” he wrote.

Boudreaux, who will take on the role of CEO on Nov. 20, will
receive an annual salary of $1.4 million with a potential bonus
of up to 350 percent of her salary, along with an initial stock
grant worth $2 million. Long-term incentives are worth up to
$10.25 million.

Swedish orchestrated Anthem’s $54 billion deal for smaller rival
Cigna Corp in 2015, which was ultimately scrapped as regulators
said that and Aetna’s proposed acquisition of Humana Inc would be
anti-competitive.

Two weeks ago, news broke that Aetna and CVS were in talks over a
deal that would create a combined health insurance, pharmacy
benefit management, and pharmacy company. The deal is expected in
December, Reuters reported.

The impact of that deal is unclear on Anthem’s recently announced
plan to use CVS to help manage its pharmacy benefits business as
it exits its contract with Express Scripts Holding . (Reporting
by Caroline Humer in New York and Ankur Banerjee in Bengaluru;
Editing by Bernard Orr and Sai Sachin Ravikumar)